| Fair Value |
Note 12 — Fair Value GAAP defines fair value and establishes a framework for measuring and disclosing fair value. Fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. For a detailed description of the Company’s fair value measurement framework, including valuation methodologies and the classification of financial instruments within the fair value hierarchy, refer to Note 23 to the Consolidated Financial Statements in the 2025 Form 10‑K. The tables below present the Company’s fair value measurements as of September 30, 2026 and December 31, 2025. There were no transfers into or out of Level 3 during the periods presented. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
Fair Value |
|
|
Quoted Prices
In Active
Markets
for Identical
Assets
(Level 1) |
|
|
Significant
Other
Observable
Inputs
(Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
|
September 30,2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
119,731 |
|
|
$ |
— |
|
|
$ |
119,731 |
|
|
$ |
— |
|
|
Mortgage loans held for sale |
|
|
49,313 |
|
|
|
— |
|
|
|
49,313 |
|
|
|
— |
|
|
Trading securities |
|
|
141,534 |
|
|
|
— |
|
|
|
141,534 |
|
|
|
— |
|
|
Securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage-backed securities issued by U.S. government |
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies or sponsored enterprises |
|
|
1,836,004 |
|
|
|
— |
|
|
|
1,836,004 |
|
|
|
— |
|
|
Residential collateralized mortgage-obligations issued by U.S. government |
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies or sponsored enterprises |
|
|
1,958,644 |
|
|
|
— |
|
|
|
1,958,644 |
|
|
|
— |
|
|
Commercial mortgage-backed securities issued by U.S. government |
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies or sponsored enterprises |
|
|
1,028,519 |
|
|
|
— |
|
|
|
1,028,519 |
|
|
|
— |
|
|
State and municipal obligations |
|
|
1,035,036 |
|
|
|
— |
|
|
|
1,035,036 |
|
|
|
— |
|
|
Small Business Administration loan-backed securities |
|
|
513,102 |
|
|
|
— |
|
|
|
513,102 |
|
|
|
— |
|
|
Corporate securities |
|
|
22,004 |
|
|
|
— |
|
|
|
22,004 |
|
|
|
— |
|
|
Total securities available for sale |
|
|
6,393,309 |
|
|
|
— |
|
|
|
6,393,309 |
|
|
|
— |
|
|
Mortgage servicing rights |
|
|
101,990 |
|
|
|
— |
|
|
|
— |
|
|
|
101,990 |
|
|
SBA servicing asset |
|
|
4,748 |
|
|
|
— |
|
|
|
— |
|
|
|
4,748 |
|
|
|
|
$ |
6,810,625 |
|
|
$ |
— |
|
|
$ |
6,703,887 |
|
|
$ |
106,738 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
987,960 |
|
|
$ |
— |
|
|
$ |
987,960 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
222,886 |
|
|
$ |
— |
|
|
$ |
222,886 |
|
|
$ |
— |
|
|
Mortgage loans held for sale |
|
|
61,400 |
|
|
|
— |
|
|
|
61,400 |
|
|
|
— |
|
|
Trading securities |
|
|
110,183 |
|
|
|
— |
|
|
|
110,183 |
|
|
|
— |
|
|
Securities available for sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage-backed securities issued by U.S. government |
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies or sponsored enterprises |
|
|
1,698,108 |
|
|
|
— |
|
|
|
1,698,108 |
|
|
|
— |
|
|
Residential collateralized mortgage-obligations issued by U.S. government |
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies or sponsored enterprises |
|
|
2,185,584 |
|
|
|
— |
|
|
|
2,185,584 |
|
|
|
— |
|
|
Commercial mortgage-backed securities issued by U.S. government |
|
|
|
|
|
|
|
|
|
|
|
|
|
agencies or sponsored enterprises |
|
|
832,449 |
|
|
|
— |
|
|
|
832,449 |
|
|
|
— |
|
|
State and municipal obligations |
|
|
1,007,412 |
|
|
|
— |
|
|
|
1,007,412 |
|
|
|
— |
|
|
Small Business Administration loan-backed securities |
|
|
568,433 |
|
|
|
— |
|
|
|
568,433 |
|
|
|
— |
|
|
Corporate securities |
|
|
21,770 |
|
|
|
— |
|
|
|
21,770 |
|
|
|
— |
|
|
Total securities available for sale |
|
|
6,313,756 |
|
|
|
— |
|
|
|
6,313,756 |
|
|
|
— |
|
|
Mortgage servicing rights |
|
|
84,032 |
|
|
|
— |
|
|
|
— |
|
|
|
84,032 |
|
|
SBA servicing asset |
|
|
5,512 |
|
|
|
— |
|
|
|
— |
|
|
|
5,512 |
|
|
|
|
$ |
6,797,769 |
|
|
$ |
— |
|
|
$ |
6,708,225 |
|
|
$ |
89,544 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
554,748 |
|
|
$ |
— |
|
|
$ |
554,748 |
|
|
$ |
— |
|
|
Fair Value Option The Company has elected the fair value option for mortgage loans held for sale primarily to ease the operational burden required to maintain hedge accounting for these loans. The Company also has opted for the fair value option for the SBA servicing asset, as it is the industry-preferred method for valuing such assets. The following table summarizes the difference between the fair value and the unpaid principal balance of mortgage loans held for sale and the changes in fair value of these loans:
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
(Dollars in thousands) |
|
2026 |
|
|
2025 |
|
|
Fair value |
|
$ |
49,313 |
|
|
$ |
61,400 |
|
|
Unpaid principal balance |
|
|
49,287 |
|
|
|
59,371 |
|
|
Fair value less aggregated unpaid principal balance |
|
$ |
26 |
|
|
$ |
2,029 |
|
|
Changes in Level 1, 2 and 3 Fair Value Measurements There were no changes in hierarchy classifications of Level 3 assets or liabilities for the nine months ended September 30, 2026. A reconciliation of the beginning and ending balances of the MSRs recorded at fair value on a recurring basis for the nine months ended September 30, 2026, is as follows. The changes in fair value of the MSRs are recorded in Mortgage Banking Income on the Consolidated Statements of Income.
|
|
|
|
|
|
(Dollars in thousands) |
|
MSRs |
|
|
Fair value, January 1, 2026 |
|
$ |
84,032 |
|
|
Servicing assets that resulted from transfers of financial assets |
|
|
5,716 |
|
|
Changes in fair value due to valuation inputs or assumptions |
|
|
20,569 |
|
|
Changes in fair value due to decay |
|
|
(8,327 |
) |
|
Fair value, September 30,2026 |
|
$ |
101,990 |
|
|
A reconciliation of the beginning and ending balances of the SBA servicing asset, a Level 3 asset recorded at fair value on a recurring basis for the period ending September 30, 2026, is as follows. The changes in fair value of the SBA servicing asset are recorded in in SBA Income on the Consolidated Statements of Income.
|
|
|
|
|
|
(Dollars in thousands) |
|
SBA Servicing Asset |
|
|
Fair value, January 1, 2026 |
|
$ |
5,512 |
|
|
Servicing assets that resulted from transfers of financial assets |
|
|
409 |
|
|
Changes in fair value due to decay |
|
|
(1,243 |
) |
|
Changes in fair value due to valuation inputs or assumptions |
|
|
70 |
|
|
Fair value, September 30,2026 |
|
$ |
4,748 |
|
|
There were no unrealized losses included in accumulated other comprehensive income related to Level 3 financial assets and liabilities at September 30, 2026. See Note 17 — Mortgage Loan Servicing, Origination, and Mortgage Loans Held for Sale for information about recurring Level 3 fair value measurements of mortgage servicing rights. Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The tables below present the recorded amount of assets and liabilities measured at fair value on a nonrecurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
Fair Value |
|
|
Quoted Prices
In Active
Markets
for Identical
Assets
(Level 1) |
|
|
Significant
Other
Observable
Inputs
(Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
|
September 30,2026: |
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO |
|
$ |
15,220 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15,220 |
|
|
Bank properties held for sale |
|
|
6,836 |
|
|
— |
|
|
— |
|
|
|
6,836 |
|
|
Individually evaluated loans |
|
|
223,975 |
|
|
— |
|
|
— |
|
|
|
223,975 |
|
|
December 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
OREO |
|
$ |
8,771 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
8,771 |
|
|
Individually evaluated loans |
|
|
328,452 |
|
|
— |
|
|
— |
|
|
|
328,452 |
|
|
For an individually evaluated loan, the fair value of collateral is measured based on appraisal or third-party valuation when the loan is placed on nonaccrual. For OREO and bank properties held for sale, the fair value is initially recorded based on external appraisals at the time of transfer. These assets recorded at fair value on a nonrecurring basis are updated on at least an annual basis. Quantitative Information about Level 3 Fair Value Measurement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Discount |
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
Valuation Technique |
|
Unobservable Input |
|
2026 |
|
2025 |
Nonrecurring measurements: |
|
|
|
|
|
|
|
|
|
|
|
|
Individually evaluated loans |
|
Discounted appraisals and discounted cash flows |
|
Collateral discounts |
|
|
23 |
|
% |
|
|
19 |
|
% |
OREO and Bank properties held for sale |
|
Discounted appraisals |
|
Collateral discounts and estimated costs to sell |
|
|
4 |
|
% |
|
|
2 |
|
% |
Fair Value of Financial Instruments The estimated fair value, and related carrying amount, of our financial instruments are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying |
|
|
Fair |
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
|
Amount |
|
|
Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
September 30,2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,974,618 |
|
|
$ |
2,974,618 |
|
|
$ |
2,974,618 |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Trading securities |
|
|
141,534 |
|
|
|
141,534 |
|
|
|
— |
|
|
|
141,534 |
|
|
|
|
— |
|
|
Investment securities |
|
|
8,705,780 |
|
|
|
8,319,757 |
|
|
|
287,005 |
|
|
|
7,912,585 |
|
|
|
|
120,167 |
|
|
Loans held for sale |
|
|
296,835 |
|
|
|
297,162 |
|
|
|
— |
|
|
|
297,162 |
|
|
|
|
— |
|
|
Loans, net of allowance for credit losses |
|
|
51,464,175 |
|
|
|
50,926,865 |
|
|
|
— |
|
|
|
— |
|
|
|
|
50,926,865 |
|
|
Accrued interest receivable |
|
|
253,452 |
|
|
|
253,452 |
|
|
|
— |
|
|
|
35,312 |
|
|
|
|
218,140 |
|
|
Mortgage servicing rights |
|
|
101,990 |
|
|
|
101,990 |
|
|
|
— |
|
|
|
— |
|
|
|
|
101,990 |
|
|
SBA servicing asset |
|
|
4,748 |
|
|
|
4,748 |
|
|
|
— |
|
|
|
— |
|
|
|
|
4,748 |
|
|
Interest rate swap – non-designated hedge |
|
|
117,921 |
|
|
|
117,921 |
|
|
|
— |
|
|
|
117,921 |
|
|
|
|
— |
|
|
Other derivative financial instruments (mortgage banking related) |
|
|
1,810 |
|
|
|
1,810 |
|
|
|
— |
|
|
|
1,810 |
|
|
|
|
— |
|
|
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
|
13,445,715 |
|
|
|
13,445,715 |
|
|
|
— |
|
|
|
13,445,715 |
|
|
|
|
— |
|
|
Interest-bearing other than time deposits |
|
|
35,840,527 |
|
|
|
35,840,527 |
|
|
|
— |
|
|
|
35,840,527 |
|
|
|
|
— |
|
|
Time deposits |
|
|
8,352,039 |
|
|
|
8,323,116 |
|
|
|
— |
|
|
|
8,323,116 |
|
|
|
|
— |
|
|
Federal funds purchased and securities sold under agreements to repurchase |
|
|
498,173 |
|
|
|
498,173 |
|
|
|
— |
|
|
|
498,173 |
|
|
|
|
— |
|
|
Corporate and subordinated debentures |
|
|
696,855 |
|
|
|
678,415 |
|
|
|
— |
|
|
|
678,415 |
|
|
|
|
— |
|
|
Other borrowings |
|
|
300,000 |
|
|
|
299,994 |
|
|
|
— |
|
|
|
299,994 |
|
|
|
|
— |
|
|
Accrued interest payable |
|
|
37,494 |
|
|
|
37,494 |
|
|
|
— |
|
|
|
37,494 |
|
|
|
|
— |
|
|
Interest rate swap – non-designated hedge |
|
|
982,452 |
|
|
|
982,452 |
|
|
|
— |
|
|
|
982,452 |
|
|
|
|
— |
|
|
Other derivative financial instruments (mortgage banking related) |
|
|
5,508 |
|
|
|
5,508 |
|
|
— |
|
|
|
5,508 |
|
|
|
— |
|
|
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,172,483 |
|
|
$ |
3,172,483 |
|
|
$ |
3,172,483 |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Trading securities |
|
|
110,183 |
|
|
|
110,183 |
|
|
|
— |
|
|
|
110,183 |
|
|
|
|
— |
|
|
Investment securities |
|
|
8,715,214 |
|
|
|
8,400,034 |
|
|
|
274,730 |
|
|
|
8,046,606 |
|
|
|
|
78,698 |
|
|
Loans held for sale |
|
|
345,343 |
|
|
|
348,381 |
|
|
|
— |
|
|
|
348,381 |
|
|
|
|
— |
|
|
Loans, net of allowance for credit losses |
|
|
48,013,330 |
|
|
|
47,378,022 |
|
|
|
— |
|
|
|
— |
|
|
|
|
47,378,022 |
|
|
Accrued interest receivable |
|
|
233,265 |
|
|
|
233,265 |
|
|
|
— |
|
|
|
35,302 |
|
|
|
|
197,963 |
|
|
Mortgage servicing rights |
|
|
84,032 |
|
|
|
84,032 |
|
|
|
— |
|
|
|
— |
|
|
|
|
84,032 |
|
|
SBA servicing asset |
|
|
5,512 |
|
|
|
5,512 |
|
|
|
— |
|
|
|
— |
|
|
|
|
5,512 |
|
|
Interest rate swap – non-designated hedge |
|
|
221,835 |
|
|
|
221,835 |
|
|
|
— |
|
|
|
221,835 |
|
|
|
|
— |
|
|
Other derivative financial instruments (mortgage banking related) |
|
|
1,051 |
|
|
|
1,051 |
|
|
|
— |
|
|
|
1,051 |
|
|
|
|
— |
|
|
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
|
13,375,697 |
|
|
|
13,375,697 |
|
|
|
— |
|
|
|
13,375,697 |
|
|
|
|
— |
|
|
Interest-bearing other than time deposits |
|
|
34,410,867 |
|
|
|
34,410,867 |
|
|
|
— |
|
|
|
34,410,867 |
|
|
|
|
— |
|
|
Time deposits |
|
|
7,359,233 |
|
|
|
7,347,648 |
|
|
|
— |
|
|
|
7,347,648 |
|
|
|
|
— |
|
|
Federal funds purchased and securities sold under agreements to repurchase |
|
|
618,215 |
|
|
|
618,215 |
|
|
|
— |
|
|
|
618,215 |
|
|
|
|
— |
|
|
Corporate and subordinated debentures |
|
|
696,536 |
|
|
|
683,772 |
|
|
|
— |
|
|
|
683,772 |
|
|
|
|
— |
|
|
Accrued interest payable |
|
|
48,972 |
|
|
|
48,972 |
|
|
|
— |
|
|
|
48,972 |
|
|
|
|
— |
|
|
Interest rate swap – non-designated hedge |
|
|
554,433 |
|
|
|
554,433 |
|
|
|
— |
|
|
|
554,433 |
|
|
|
|
— |
|
|
Other derivative financial instruments (mortgage banking related) |
|
|
315 |
|
|
|
315 |
|
|
|
— |
|
|
|
315 |
|
|
|
|
— |
|
|
|